Personal Finance Tips » Loan Consolidation

FAFSA Education Loans – Insider’s Secrets To Education Loans

admin — Fri, 17 Dec 2010 17:46:47 +0000

So, you are going to college or another institute of higher learning? If you are smart, you have already done your FAFSA or Free Application for Federal Student Aid. There are some sources of aid, such as grants and scholarships, which are a limited resource and the early birds are going to have first bite at those particular worms. The FAFSA is the key to these and the loans which are available under the Federal Government’s programs.

Many of the Federal student loans from the FAFSA or are funded by private companies, such as Sallie Mae (not a government organization at all as many think), Wells Fargo, College Loan Corporation, etc. These are lenders under the FFEL or Federal Family Education Loan program.

Many of you will have no choice as to who your lender is. Your school may work with the Federal Government’s DIRECT program which means the loan is directly from the government. There is no confusion in that case, however you may miss out on some of the bonuses that the private companies working with the FFEL program offer, such as discounted interest rates.

Others will find that their school has a “preferred lender”, and you have no choice in who their student lender is. This may be for the school’s benefit, as their process is streamlined, or maybe there was an incentive from the lender for the school using only that company.

The rest of you are going to be bombarded with choices. In most cases you will end up phoning the numbers in the mailers and speaking to a student loan officer.

I used to work for one of the bigger student loan companies. When you try to get a FAFSA based loan for college and university, you will be pitched in a very particular way.

I am going to let you in on how they sell these loans to you.

The education loan consolidation and Plus / Stafford loan pitches that you will find at the consumer resource FAFSA Loan will let you be prepared to deal on equal terms with the education financial aid industry.

There is nothing underhanded, but you do want to be prepared so that you make the decision which is best for you, not for the student loan officer. These people are paid on a commission basis.

PLUS Loans and Stafford Loans

On the PLUS Loan and Stafford Loan Script page you will find an explanation of the pitch I used for Federal education loans for when the student was still at school. Two of the things that were drummed into us was to convey a sense of urgency, and also that this was a FEDERAL GOVERNMENT program. We weren’t told to make anyone think that we were the government, but if they did, it certainly couldn’t hurt.

Note that Stafford loans are sometimes referred to as an unsubsidized student loan or a subsidized student loan.

Consolidation Loans

Once you have finished school you may want to consolidate your student loans. At this point you may have the opportunity to contact the lending companies again. And don’t worry, they will be contacting you, too!

On the Consolidating FAFSA Loans page you will find the a summary of the script that a lender will use to convince you to consolidate. Again the modus operandi was to convey a sense of urgency, and also that this was a FEDERAL GOVERNMENT program.

Remember that there are deadlines for these loans but they are usually based on publicly known dates such as school dates and interest rate changes by the Federal Government. If a lender tries to tell you to get your application in within three weeks or “your file will be closed”, don’t worry. The “file” can be opened again real easy!

All the best in your education, and don’t hesitate to contact us if you have any questions or comments.

Education Loan Consolidation – Finding The Best Repayment Option

admin — Thu, 04 Nov 2010 06:18:33 +0000

Apart from getting married or passing the bar exam, graduation is a major achievement in any person’s life, but it does mean repayment on all of the loans you have received during your college years.

Debt Consolidation Loans Can Shoulder your Multiple Debt Burdens

admin — Sat, 27 Mar 2010 16:51:23 +0000

Are you suffering form multiple debts, all of very high interest rate and can’t find a way to get rid of them? Well, if this is so then debt consolidation loans are what you should opt for. Debt consolidation loans are specially crafted to help people get rid of their multiple debts easily.

Debt consolidation loans are basically of two types, secured and unsecured debt consolidation loans. While collateral is needed to avail a secured debt consolidation loan, unsecured debt consolidation loans can be availed without placing any security against the loan amount.

Secured debt consolidation loans

As the name suggests, secured debt consolidation loans can be availed by placing a security against the loan amount. This can be any of your personal property like car, home, bank account etc. Placing a collateral helps avail debt consolidation loan at very low interest rate and with flexible repayment duration. The loan amount that can be availed with secured debt consolidation loans ranges from £5000 – £75000, the repayment duration being 5 – 25 years. This amount can further be increased by placing collateral befitting the amount.

Unsecured debt consolidation loans

Unsecured debt consolidation loans can be availed without placing any collateral against the loan amount. As the lenders don’t have any security against the loan amount they disburse comparatively smaller amount that ranges from £1000 – £25000. Unsecured debt consolidation loans are short term loans with repayment duration ranging from 1 – 10 years.

Debt consolidation loans are very beneficial for debt ridden people. With debt consolidation loans you can merge all your existing debts into a single debt at very low interest rate and with flexible repayment duration. This way you will have to pay only one monthly installment instead of many. Also you will be answerable to only one lender instead of many.

There are various banks, financial institutions and lending firms that offer debt consolidation loans. Search well before applying for debt consolidation loans. With an exhaustive search you can find a lender offering debt consolidation loans at low interest rate and with flexible repayment duration. With debt consolidation loans you can get rid of multiple debts and lead a debt free life.

Debt Consolidation Loans And How They Can Help You

admin — Sat, 20 Mar 2010 17:31:21 +0000

ng>Debt Consolidation Loans

Debt Consolidation Loans combine multiple debts into a single, manageable loan . Shakespearefinance has tie-ups with a range of highly experienced, competent lenders, who work towards providing competitive rates on debt consolidation loans to both homeowners and tenants. Debt consolidation loans are secured against your property and can provide lenders with a greater capacity to lend.

Debt consolidation loans are secured loans. A secured loan is one in which the borrower uses something that he owns as collateral for a loan. Debt consolidation loans make it so that you only have one smaller monthly debt payment. This can free up money to make your ability to enjoy life as you pay off your debt much more possible. Debt consolidation loans are offered to the debtors in two ways. If you don’t wish to pledge collateral as well as want to obtain a debt consolidation loan, then the best way for you is to opt for unsecured debt consolidation loan.

Mortgage offers contain many terms less than 30 years and some are as few as 10 years. Refinance mortgage rates can make a big difference in your lifestyle and your finances for years to come. Mortgage rates are going lower while credit card rates are still going up. Also, some credit card issuers are being switched from fixed rates to variable.

Loan companies usually sell debt consolidation loans as a way of consolidating your bills into one, lower, easy to manage, easy to afford payment. By consolidating your debts into one loan you may be able to obtain a much lower monthly payment, this could make life more affordable or free up money for another purchase.

Loans subject to status and where mortgages are involved, subject also to type and value of property. The actual rate available will depend upon your circumstances. Loaning money to consumers is how the banks make most of their money. The banks charge interest that has to be paid back along with the initially borrowed principal.

Loans for individuals with bad credit are called “bad credit loans” and they are available to finance a number of items. Bad credit loans can be used to purchase cars, or even debt consolidation and personal loans. Loan not in favor of property is recognized as secure. It gets you lesser interest rates, higher loan amount, easier installments and longer time period for repayment. Loans can add burden to our lives if not properly managed. That is why we consider debt consolidation loans as the best choice that can help us reduce the burden with out debts

How to Avoid the Risk & Benefit From Debt Consolidation Loan

admin — Wed, 17 Feb 2010 13:14:36 +0000

Debt issue is a matter for many people. Survey results show that American households are carrying an average of $10,000 debt, mainly on credit cards debt. Paying back multiple debts have long stayed a headache for many debtors, and a debt consolidation loan has been a primary solution of this phenomena. While you can benefit from consolidating your multiple debts with a debt consolidation loan, there are some risks that you need to beware of and avoid yourself from these risks. This article will discusses some of the risks of debt consolidation loan, how to avoid it and how you can benefit from utilizing a debt consolidation loan to restructure your life financially.

The Risk of Debt Consolidation Loan

A debt consolidation loan is just another loan that acts simply as replacement of you multiple debts. It allows you to combine all your debts into single debt and pay off with a new loan.

Many debt consolidation loans lower your monthly payments by extending the loan repayment period but the new loan’s interest rate remains the same with your old interest rate. Hence, if you calculate it carefully, you will end up with paying more in total interest. You can avoid this by carefully select your consolidation loan package that has reasonable low interest rate and a repayment term that enough to lower the monthly payment to your affordability. Don’t take the maximum repayment term as you will end up with paying a lot more total interest.

A debt consolidation loan may causes you trap into more debts, why? A debt consolidation loan clears all your credit card debt and your credit cards are free and back to the maximum limit for uses again. Many debtors have forgot that their debt still remain, just change from credit card debt to a consolidation loan. They are very happy that their credit cards can be used again, the impulse purchases, temptation of spending without remembering that they still have a consolidation loan to be payoff, adding more balances into their credit cards and becomes their new debt when they can’t pay it later.

Hence, you must commit to yourself to get out of debt and have a self discipline to control your expenses while repay your consolidation loan. The best way to avoid new credit card debt is terminating all your credit cards; if you enjoy the convenient of cashless payment, a debit card can serves the same purpose.

Benefits of Debt Consolidation Loan

A debt consolidation loan can help you to have a debt relief from your overwhelming debt issue. If your monthly debt payment has exceeded your financial affordability, a lower interest rate debt consolidation loan with a lightly longer repayment term can help you to lower your month repayment and bring your overdue debt to current status, saving your from additional finance charges.

If you want to get rid of debt, you need to be able to manage it properly; a debt consolidation loan allows you to combine all your debts into one for better debt management while you are working your way out of debt.

There are many cheap debt consolidation loans available due to the market competitive between lenders, you may find a good deal among them; Ask as many lenders as possible to send you their debt consolidation loan’s details and carefully review each and every one of them before you finalize your choice.

Summary

A debt consolidation loan is a good option to get your debt into a control level while working out of it. You must be smart enough to utilize the benefits of debt consolidation loan in helping your to solve your debt problem and avoiding the potential risks of debt consolidation loan that may cause you into deeper debt issue.

Getting a Student Consolidation Loan When the Rates Are Low

admin — Mon, 08 Feb 2010 21:15:57 +0000

Amidst the economic recession and the global financial crisis being experienced on a global scale, there is still hope for those who want to get a student consolidation loan. To add to the good news, interest rates on federally subsidized student loans are dropping, so it’s best to catch the momentum to get yourself consolidated for even lower rates.

Understanding Student Consolidation Loan

Consolidation works in this manner: you get a larger loan to cover a set of other student loans so you get a longer repayment period. When that happens, you can either pay the lower monthly bills or try your best to pay the whole debt in a shorter period of time.

The shorter the period of time, the lower the sum would be. The longer it takes to pay it off, the bigger the sum will be. A student consolidation loan works like other loans, but the beauty of the approach is that you can indeed get a lower interest rate.

For example, if you have a Stafford loan at 8.25%, the interest rate will be reduced to 7% upon consolidation. Instead of paying more than $500 a month, you can choose to pay about $350 or less. If the consolidation gives you an ever-lower rate, because rates from Sallie Mae are dropping, you get an even lower fixed rate.

According to Steve Cocks, a spokesperson for the Parent Plus program at Sallie Mae, explains the beauty of getting a loan for financial black holes:

“This will help families when looking at how to finance the next academic year, as tuition bills start coming due, families are wondering how to put the final pieces together, and when they learn of the new interest rates they will realize [loans are] a very attractive financing vehicle for education.”

Why Loans Work?

Loans allow a person to continue with his education even if the financial clout is not present, at least not yet. Financial aids (such as scholarship and other grants) do not cover everything. Say a grant covers the tuition fees, it will not grant lodging, food and transportation. Higher education is not hinged on just formal matriculation but on dozens of other expenses that come about during a four or five year period.

This is why people often end up with debts of upwards $50,000. Some even have the misfortune of having spent more than $100,000 during their college days. The immediate problem after graduation is how to pay off the whole thing without going hungry. Bankruptcy is not the answer – options like student loan consolidation are.

The Benefits of Student Consolidation Loan

The benefits of a student consolidation loan, according to Greg Stringer, the senior vice president of education finance at National City Bank:

“Any loan that is a variable-rate loan will benefit from the fact that we’re at record low interest rates right now. But the real bargain happens to be for students who are extending their repayments by taking advantage of the consolidation program.”

Low rates coupled with beneficial consolidation can extend the life of loans and can prevent a person from defaulting or filing for bankruptcy.